Banking industry continues to pull down stock market

The recent drop in the stock market which has sent the dow average down to their lowest levels over the past six years can be directly attributed to the banking industry. Major national banks such as Citigroup, Bank of America, JP Morgan have seen their share prices under a severe selling pressure following the premature bank rescue plan the Secretary Geithner announced a little over one week ago. Following this announcement of a new process to fix the banking industry and restore lending, banks have seen their market caps drop in some cases by over 50%. There is a growing speculation that one of the methods the government will need to look into will be nationalizing the countries largest banks. Concerns are abundant that despite the injections of billions of dollars into these banks through the TARP program that these companies are severely undercapitalized. The challenge in the market is trying to determine the fair market value of these banks balance sheets and the billions of dollars they will require in the future as they continue to write down the value of their assets as loan losses continue to grow. The recent foreclosure fix by the government is being reviewed with mixed results as their is a ground swell of emotion that taxpayers are growing more resentful to the continued handouts without a direct benefit to themselves. Lowering mortgage rates for only home owners who do not have equity is drawing the most criticism.